West Coast Editor

On the heels of a potential $92 million deal with Ilypsa Inc. for Ilypsa's Phase I phosphate binder, Astellas Pharma Inc. has licensed early stage, oral anemia compounds from FibroGen Inc. in a pact worth $300 million up front plus milestones totaling as much as $465 million.

Tokyo-based Astellas is also buying $50 million worth of FibroGen's stock in order to license FG-2216, FG-4592 and other inhibitors of prolyl hydroxylase, an enzyme that mediates degradation of hypoxia-inducible factor, critical for the body's production of endogenous erythropoietin.

The deal is "certainly fairly large in terms of the normal metrics," acknowledged Willliam Hodder, vice president of business development for South San Francisco-based FibroGen, but noted the EPO market worldwide is huge.

"I sometimes refer to it as a $12 billion niche protein market because anemia is really not that well penetrated," he said, citing the route of administration and price as reasons.

The deal covers the compounds FG-2216, FG-4592 and others compounds with similar mechanisms of action for exclusive development and marketing in Europe, the Commonwealth of Independent States, the Middle East and South Africa.

When EPO comes to mind, typically so does Amgen Inc., of Thousand Oaks, Calif., with its blockbuster Aranesp, the second generation of Epogen (epoetin alfa), which Johnson & Johnson sells under the trade name Procrit. Injected EPO now is the mainstay therapy for anemia, but FibroGen has come up with an oral approach.

"It's not really oral EPO," Hodder said, but a stimulator of the body's production of EPO, with other advantages. "You need to get iron to the right place in the body" for teh production of red blood cells, for example, and FibroGen's approach has effects on iron-transporting enzymes.

"The way we think about it is, EPO is the horn section, and we're doing the whole symphony," he said, adding that he was not aware of other firms in the clinic with prolyl hydroxylase inhibitors, though rumors circulate of companies considering the space.

"It will take a number of years before other companies are able to catch up," Hodder said - and they will have significant intellectual property challenges in FibroGen's portfolio.

FibroGen was investigating prolyl hydroxylase inhibitors in fibrosis when researchers at Dana-Farber Cancer Institute and the University of Oxford found its activity in erythropoesis, he said.

"We figured out the structure-activity relationship [of FG-2216] and developed a number of others," he said.

Jonathan Dickstein, co-chair of the life sciences group for Morrison & Foerster LLP in New York, which represented Astellas in the deal, acknowledged that by switching gears in the research "you could run into trouble, but FibroGen has been doing this a long time. We bought in to this compound after that transition."

In Europe, FG-2216 is in exploratory trials directed by FibroGen for renal anemia and chemotherapy-induced anemia, and its efficacy for treating renal anemia in EPO-na ve patients already has been confirmed.

Astellas will join studies under way in the U.S. and Europe, and as part of what Hodder called a "joint trans-Atlantic development program," will start with FibroGen Phase IIb trials for renal anemia in the first half of the fiscal year ending March 2007. The firms also plan to jointly develop FG-2216 for oncology indications such as chemotherapy-induced anemia and cancer-related anemia.

Dickstein pointed out the deal is "building on an existing relationship, which sometimes helps a lot." In June 2005, Astellas signed a definitive agreement for the exclusive rights to develop and market FG-2216 in Japan and is conducting Phase I trials targeting renal anemia associated with chronic renal insufficiency at the pre-dialysis and dialysis stages.

As a result of their efforts, FibroGen and Astellas said they hope to get a piece of those large markets not served by EPO products currently, including not only chronic kidney disease patients not yet on dialysis but also congestive heart failure and anemia related to aging.

Dickstein represents Tanox Inc., of Houston, in the three-way collaboration with Basel, Switzerland-based Novartis AG and Genentech Inc., of South San Francisco, for the asthma drug Xolair (omalizumab) and other anti-IgE products. Among others, he also represented Emeryville, Calif.-based Chiron Corp. (now part of Novartis) in negotiating development and manufacturing agreements for inhaled antibiotics with Nektar Therapeutics Inc., of San Carlos, Calif.

"Every deal is a little different," he said. "A lot of the same issues come up, but [FibroGen's agreement with Astellas] was a very significant and comprehensive transaction," with "some provisions that were innovative and new." Details are confidential but will be made public in filings eventually, Dickstein added.

The FibroGen deal continues something of a buying spree for Astellas. Last week's pact with Santa Clara, Calif.-based Ilypsa followed news earlier in April, when the firm agreed to acquire worldwide rights to Amevive (alefacept) from Cambridge, Mass.-based Biogen Idec Inc. for $60 million. Approved in 2003 for psoriasis, Amevive had not been selling as well as hoped. (See BioWorld Today, April 5, 2006.)